High inflation due to external factors: Pranab

PTI The Union Finance Minister, Mr Pranab Mukherjee, in the Lok Sabha in New Delhi on Wednesday. (file photo)

New Delhi, Aug 3: 

Attributing high prices to external factors, the Government today said it is working to moderate food inflation to 5 per cent from over 8 per cent now without sacrificing growth.

Replying to a debate in Lok Sabha on price rise, the Finance Minister, Mr Pranab Mukherjee, gave details of various steps the government had taken to rein in inflation but did not outline any further strategy in this regard.

“Growth with moderate rate of inflation... that is what we want to achieve,” he said in nearly an hour-long reply which left NDA “disappointed” and was followed by a walkout by the BSP, SP, BJD, AIADMK and Left parties.

Through a division, the House negated the amendment moved by CPI leader, Mr Gurudas Dasgupta, which wanted a reference to the “failure” of the government to curb food price inflation.

Later, it adopted the motion by voice-vote.

Pointing out that the food inflation has come down from 22 per cent in February 2010 to 8.3 per cent in July this year, he said, “I am not accepting it. This is not the benchmark.”

The Finance Minister said the comfortable level of food inflation is five per cent but six to seven per cent can be tolerated.

Responding to the demand for removing subsidy on diesel used by passenger cars, Mr Pranab Mukherjee said: “We can accept the suggestion and try to work out what mechanism could be found out so that this section (passenger car owners) are not subsidised.”